The Leader in Airport Security, and in Lapses

ATLANTA, Nov. 8 -- It seemed impossible, at a time when fingernail clippers are being confiscated by the hundreds at American airports, that a man could slip past a checkpoint at O'Hare International Airport in Chicago with a bag of knives, Mace and other weapons.

But security experts in the aviation industry were not surprised to learn that the workers running the scanners at that United Airlines terminal on Saturday were employed by Argenbright Security, the nation's largest and most frequently criticized airport-security company. The incident in Chicago only added to a long list of security lapses involving the company N like hiring workers with criminal records and forging documents to cover up its failure to perform background checks.

Argenbright has come to dominate the industry in the last 20 years with a corps of 6,000 checkpoint screeners, almost all of whom make little more than minimum wage and receive no health benefits or sick days. Its security problems and high turnover have become the principal argument of those in Congress who want to federalize airport security.

The company, which began as a small polygraph operation in 1979, has been an aggressive competitor in the battle to get contracts with major airlines and now has 40 percent of the nation's airport security business. Just today the company began handling Southwest Airlines flights at the Baltimore airport.

But as the airlines sought to cut costs and award security contracts to the lowest bidder, screening companies began what many in the industry call a race to the bottom, hiring employees at the lowest possible wages and cutting corners to keep checkpoints manned, with turnover approaching 400 percent a year in some airports.

Argenbright's rise has been accompanied by federal convictions on conspiracy to avoid performing background checks for employees in Philadelphia last year, a jail term for one company supervisor, and probation for the company in Pennsylvania and Illinois. A labor-law judge ruled the company illegally threatened to dismiss employees after they went on strike to protest low wages.

"The corporation couldn't have been blind to what was going on in places like Philadelphia," said Billie H. Vincent, the director of civil aviation security at the Federal Aviation Administration in the 1980's and now president of an airline consulting firm in Virginia. "The system in effect forced them into dishonest activity and made it impossible to do the job without cutting corners."

Bill Barbour, Argenbright's president, said in a conversation this morning that he would call back to discuss his company, but did not do so. In legal documents, however, company officials have said the Justice Department has exaggerated the extent of the background-check problem, although the company recently agreed to extend the length of its probation with the United States Attorney's office in Philadelphia.

On Sept. 11, two teams of hijackers believed to be carrying box cutters passed through Argenbright checkpoints at airports in Washington and Newark, and at two other companies' checkpoints in Boston.

The federal government said a few weeks ago that even after Argenbright agreed to conduct better background checks on its workers, it continued to hire them by the hundreds without adequately examining their pasts. Attorney General John Ashcroft accused the company of committing "an astonishing pattern of crimes that could have directly jeopardized public safety" at 13 of the nation's largest airports where it screens passengers.

"Argenbright Holdings continues to violate laws that protect the safety of Americans who travel by commercial airlines," Mr. Ashcroft said. "Our investigation shows Argenbright Holdings has hired predeparture screeners who have disqualifying criminal convictions, including convictions for theft, burglary and illegal drug possession, and that Argenbright Holdings made false statements about its employees' backgrounds."

Congressional supporters of federalizing airport security regularly use Argenbright as an example of why the system must be removed from the private sector.

The company, with 19,000 employees, says it is forced to hire large numbers of low-wage screeners quickly because of the high turnover and the cost strictures imposed upon by the airlines, which are responsible for security but hire contractors like Argenbright to do the work.

"A.S.I. faced certain challenges and had certain initial missteps in the implementation of the program" to correct its problems, wrote John C. Dodds, a lawyer for Argenbright Security Inc., in a letter to federal authorities in August. "However, over the past several months, the company has made substantial progress, which I expect will continue going forward."

Mr. Dodds said part of the reason for the company's problems was its acquisition last December by Securicor P.L.C., a British security company that paid $185 million for Argenbright. Mr. Dodds said the transfer temporarily slowed down its plans for improvement. Argenbright had been a division of AHL Services Inc., which continues as a marketing and customer-fulfillment company for other businesses. Its founder, Frank A. Argenbright Jr., was appointed chief executive of Securicor's American security operations, the offices of which remain in Atlanta.

A review of hundreds of pages of government documents on Argenbright demonstrates patterns of mismanagement that help explain why the industry has become such a target in Washington.

As prosecutors revealed in last year's criminal case in Philadelphia, Argenbright for years had no internal controls or audit systems that would have detected its district manager's deliberate forging of workers' histories to hide criminal convictions and hire as many people as possible.

Prosecutors said many of the 1,300 Argenbright workers at the Philadelphia International Airport had been hired despite failing a test required by the aviation agency, or without taking the test at all. Dozens had criminal records, including felony convictions for forgery, aggravated robbery, narcotics possession and aggravated assault. One had been arrested for kidnapping.

Instead of the required 40 hours of training, hundreds of workers were simply shown a 45-minute video and pronounced by Argenbright fit to begin X-raying carry-on baggage and running the metal detectors.

The Philadelphia district manager who changed the workers' histories, Steven E. Saffer, told his superiors of serious problems at the airport, but they did nothing about it, prosecutors said. Mr. Saffer is serving a 30- month federal prison sentence, and two of his colleagues at the airport received fines and probation. None of Argenbright's top officials were indicted, but the company pleaded guilty to two counts of making false statements to the agency and paid fines and penalties of $1.55 million.

Assistant United States Attorney John J. Pease, who prosecuted the case, said the penalties would have been far greater had the company not agreed a year ago to begin a program to prevent such problems from recurring.

"We could have charged them with 100 counts, or 1,000," Mr. Pease said, "but from our perspective it was much more important to get them to begin a program of compliance. We wanted to change their corporate culture."

That is why the Justice Department and the agency were so astonished to discover that Argenbright had not taken care of the problems after last year's plea agreement.

In a series of spot checks over the last 12 months, those agencies found that the company continued to employ and hire departure screeners with criminal backgrounds, failed to have a program of independent verification of worker's backgrounds, and waited nine months to even have a meeting of its new compliance management committee.

The government found violations of aviation agency regulations by Argenbright at Dulles International Airport and Reagan National Airport outside Washington, La Guardia Airport in New York, and the major airports in Boston, Los Angeles, Detroit, Phoenix, Las Vegas, Dallas- Fort Worth, Seattle, Trenton, Columbus, Ohio, and Cedar Rapids, Iowa.

"This conduct is inexcusable and is a clear violation of the terms and conditions of its probation," prosecutors told a federal judge on Oct. 11. Although the company disputed several charges, court transcripts show that it acknowledged the overall lapses, and agreed on Oct. 23 to have its three-year probation extended by two years until October 2005. It agreed to submit compliance reports to the government and begin fingerprint background checks of workers once the agency makes available equipment for them.

Argenbright pulled out of the Philadelphia airport last month, citing economic reasons. But its successor, Aviation Safeguards of New York, has also had problems. It was sentenced to two years of probation and fined $110,000 last year after a supervisor at Miami International Airport allowed 22 employees to work in secured areas without performing background checks and then lied about his actions to the F.A.A.

Argenbright's troubles in Philadelphia were not its first. In 1999, Northwest Airlines terminated its contract with the company at the Detroit airport after seven security breaches, including one in which a screener mixed up two women at a metal detector and failed to stop one who had set off the device. Five concourses were shut down as officials searched for the woman, who turned out not to be a threat.

In June, Argenbright had to pay a $10,000 fine to the Illinois Department of Professional Regulation, which found that the company had not filed registration forms for 97 employees. And after Saturday's incident at O'Hare, the company fired two of its workers who were caught on videotape stealing two of the knives that had been confiscated from the man who tried to take them aboard the aircraft.

Mr. Argenbright was a criminal justice major from Florida who became interested in polygraph machines after being required to take a lie-detector test when applying for a job in a camera store.

He opened his own polygraph company and soon began doing other security work for his clients. The company prospered as it met the growing demand for airline security in the 1980's that followed deregulation, and by 1997 had become a diverse holding company with 60 offices and annual revenues of more than $200 million.

Its strategy of hiring minimum- wage screeners and replacing them at a rapid clip ran into trouble in 1999, however, when its employees at Los Angeles International Airport walked off the job to protest their $5.75-an-hour wages and lack of health benefits and sick days.

Mr. Vincent, the former F.A.A. security director, said: "Argenbright was aggressive in getting its contracts, but they didn't do anything the others didn't do, either. These were terribly unattractive jobs, filled by people who were always looking for another job. To keep the jobs filled and meet the airlines' quota, they had to cheat, and I'm sure you could find exactly the same things at other airports if you looked hard enough."